Field of the Invention
The embodiments of the present invention relate to systems and methods for trading financial instruments and, in particular, to systems and methods for clearing odd lots with respect to all types of financial instruments, especially in fixed income financial instruments, such as bond markets (e.g., cash credit markets, government bonds, covered bonds, etc.).
Description of Related Art
Increasingly punitive balance sheet constraints and funding costs potentially threaten dealers providing liquidity in the e-traded segment of the market—typically in more “on the run” issues and in smaller trade sizes. This is exacerbated by steady increase in smaller sized tickets from index tracking funds and fast growing ETF market leading to high number of small line items on dealer books. Thus, Dealers need to increase velocity of turnover of these positions in order to maintain profitability. Current Interdealer Broker (IDB) markets are not servicing this need satisfactorily.
Accordingly, there's a need for efficient computerized systems and methods of matching to clear “odd lot” or “scrap” bonds from balance sheets.